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York University
Administrative Studies
ADMS 2200
Kim Snow

Chapter 9Marketers think of a product as a compilation of package design and labelling brand name price availability warranty reputation image and customerservice activities that add value for the customerProductBundle of physical service and symbolic attributes designed to satisfy a customers wants and needs ServicesIntangible tasks that satisfy the needs of consumer and business usersGoodTangible products that customers can see hear smell taste or touchGoodServices ContinuumSpectrum along which goods and services fall according to their attributes from pure good to pure servicethis spectrum helps marketers visualize the difference and similarities between goods and servicesCar pure good Restaurant Goods and Services Mix Dentist Pure ServiceServices can be distinguished from goods in several waysServices are intangibleessentially asking consumers to buy a promise cant hearsmell etcServices are inseparable from the service providersservices depends on the quality provided by their employeesServices are perishableServices cannot stock their services for later so they may increase prices during peak times of demand and lower them when demand declinesCompanies cannot easily standardize servicesSome service providers trying to change this by standardizing time to receive food and promise taste or providing the same amenities at hotelsBuyers play a critical role in the creation and distribution of servicesService providers frequently require buyer input at the production and distrbution stage Ex Some service providers are trying to tailor each ervice to the customers wantsService Standards show wide variationsex School cafeteria vs steakhouseClassifying Goods and Services for Consumer and Business MarketsTwo types of products B2C and B2BTypes of Consumer ProductsUnsought Products Unsought ProductsProducts that the consumer do not realize they have a need for yet ex Long care insurance funeral homesConvenience Products Convenience ProductsGoods and Services that consumers want to purchase frequently immediately and with minimal efforts ex Milk Bread Soft DrinksImpulse goods and Servicesgoods purchased at the spur of the moment ex Gum or car wash Canada Flowers Same day DeliveryMarketers compete vigorously for prime locations in areas as well on shelvesStaples Convenience goods that consumers constantly replenish to remain a steady inventory ex Gasoline toothpasteEmergency goods and servicesGoods bought in response to unexpected and urgent needs ex Snow shovel during a snow stormShopping Products Shopping ProductsProducts that consumers purchase after comparing competing offers ex Tangible itemsClothing furniture appliances insurance home renosPurchasers lack complete information Stores name and reputation is very importantFeatures that Distinguish Shopping ProductsPhysical attributes service attributes warranties prices styling and places of purchaseMarketers treat some shopping products and homogenousand try to differentiate there products by emphasizing value price or obvious features lacked in the competitors product Perceptions of style colour and fit can all affect consumer choicesSpeciality ProductsSpecialty Productsoffer unique characteristics that cause buyers to prize those particular brandsex Guccie RitzCarlton Tiffany Jewellery Lexus FinancialLegalMedical ServicesPurchasers know exactly what they want and begin shopping with complete information and refuse to accept substitutesHighly personalized service by sales associates and image advertising help marketers promote speciality itemsNew trend is speciality items being sold at discount stores usually previous years inventoryClassifying Consumer ServicesServices are also classified based on convenience shopping and specialty products categoriesService firms may serve consumer markets business markets or bothCan be classified as equipmentbased or peoplebasedFive Question to classify certain services Nature Type Flexibility for Customization Fluctuation of Demand and Supply Delivery of ServiceApplying the Consumer Products Classification SystemClassification system helps to guide marketers in developing successful marketing strategy and effective marketing mixProblem with system is that a product or service may have characteristics of both categories and consumers differ in their buying patternsMarketers classify goods and services by considering the purchase patterns of the majority of buyersTypes of Business ProductsBusiness buyers are professional customers whose job duties require rational and costeffective purchase decisionsClassification for business products focus on product uses than consumer behaviourBusiness product uses fall into 6 categoriesInstallations accessory equipment component parts and materials raw materials supplies and business products InstallationsInstallationsBusiness products that are major capital investments ex factories assembly lines and huge machinery Requires large sums of money involves numerous decision makers negotiations last several months Vendors provide technical expertisetangible goods work closely with buying firms to fit their needsPrice doesnt dominate purchase decisions more so efficiency performance minimization of breakdowns and useful lifeTraining of buyers workforce and aftersale service is usually involvedMarketers usually focus on employing highly trained sales representatives with technical backgroundsAccessory Equipment Accessory EquipmentCapital items that typically cost less and have shorter periods of time ex Desktops and printersQuality and Service are important but price is important as well in the decision making processMarketing these products requires continuous representations and dealing with widespread geographic dispersion of purchasersA wholesaler might be used to contact potential customers in its geographic areaDo not require technical assistance and can distribute effectively through wholesalersComponent Parts and MaterialsComponent Parts and MaterialsFinished products of one producer that become a part of a final product for another producer ex Textiles paper pulp chemicalsPurchasers need regular continuous supplies of uniform quality products Marketers commonly emphasize direct sales and satisfied customers become regular buyersRaw MaterialsRaw MaterialsNatural resources such as farm products coal copper or lumber which become part of a final product ex Farm products copper lumberRaw materials carry grades to assure purchasers of uniform qualityMarketed to directly buying organizations wholesalers are big playersPrices are seldom deciding factor since prices are set at central market valuePurchasers buy from firms they consider best able to deliver the required quantities and qualitiesSuppliesSuppliesRegular expenses that a firm incurs in it daily operationsConsidered the convenience product of the business marketAlso called MRO itemsMaintenance Repair and Operating SuppliesWholesalers often facilitate sales of supplies due to the low unit prices and large number of potential buyersHeavy price competition keeps costs under control due to standardized productsBusiness buyer spends little time making decisions about these productsBusiness ServicesBusiness ServiceIntangible products that firms buy to facilitate their production and operating processes ex Financial leasing and rental insurance security and legal servicesOrganizations purchase many adjunct services ex IndigoChapters and Canada PostPrice has strong influence on purchase decisionsBuying organization must decide between buying the service or providing the service internally decided by frequency of usespecialized knowledge requiredQUALITY AS A PRODUCT STRATEGYTotal Quality Management TQMExpects all of a firms employees to continually improve products and work processes with the goal of achieving customer satisfaction and worldclass performanceManagers are responsible for communicating the goals of total quality management to all staff members and for encouraging workers to improve themselves and take pride in their workMany companies solicit reviews or feedback from customers to improve good and services
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